Bed Bath & Beyond shakes up board amid investor pressure, co-founders step down
(Reuters) – Bed Bath & Beyond Inc said it appointed five new independent members to its board, replacing some directors including co-founders Warren Eisenberg and Leonard Feinstein, after facing pressure from a trio of activist investors.
FILE PHOTO: The sign outside the Bed Bath & Beyond store is seen in Westminster, Colorado, June 22, 2016. REUTERS/Rick Wilking
Shares of the New Jersey-based home furnishing retailer rose about 2 percent before the bell.
Last month, activist investors Legion Partners Asset Management LLC, Macellum Advisors GP LLC and Ancora Advisors LLC urged Bed Bath & Beyond to replace its entire board and oust Chief Executive Steven Temares, citing the company’s inability to grow sales and margins.
The activist investors own about 5 percent stake in the company.
Bed Bath & Beyond has struggled to keep pace with changing consumer tastes and shopping habits over the years, even after introducing experimental store formats, investing in its decorative furnishing business and digital platforms.
In its latest results, the retailer forecast dismal first-quarter profits that raised doubts on the efficacy of its turnaround plan.
“The changes announced today reflect significant shareholder input and underscore our commitment to ensuring we have best-in-class governance,” said Patrick Gaston, who was named an independent chairman.
The company has also formed a committee to review all aspects of its business transformation, strategy and structure.
Following the changes effective May 1, the board will comprise 10 directors, nine of whom are independent and six women, the company said.
The activist group was asked to participate in the latest transformation of the board, but it declined the invitation. The company, however, said it remains open to engage in constructive dialogue with the investors.
The three investors were not immediately available for comment.
Shares of the retailer have risen nearly 26 percent since March 26 when the activist investors demanded changes in the company.
Reporting by Nivedita Balu in Bengaluru; Editing by Shinjini Ganguli